US markets ended Friday on a down note, with technology stocks leading the decline. The S&P 500 fell 1.1%, wiping out gains from the previous week when it hit an all-time high. The Nasdaq composite, heavily weighted with tech stocks, dropped 2.1%, marking its worst weekly performance since June. The Dow Jones Industrial Average fared slightly better, closing just 0.3% lower.
Chipmakers and other tech companies central to the artificial intelligence industry saw significant losses. Micron Technology fell 5.6%, Advanced Micro Devices dropped 6%, Broadcom lost 4.5%, and Intel gave up 5.8%. Meta and Google parent Alphabet also finished in the red, down 3.7% and 2.5%, respectively. Investors are growing concerned about the sustainability of the AI buildout and the ability of these companies to continue borrowing and spending heavily amid rising bond yields.
Netflix’s stock fell 2.9% after announcing a change in leadership, with Chief Content Officer Bela Bajaria being replaced by Peter Rice. This comes days after the company revealed plans to lay off about 6% of its workforce, totaling nearly 1,000 positions. Energy stocks, however, held up better, with Exxon rising 2.5% and Chevron adding 2.6%. European and Asian markets closed higher.
In the bond market, the yield on the 10-year Treasury slipped to 5.09% from 5.10% late Thursday. Despite reports of rising inflation, yields have remained relatively steady. The Federal Reserve Chairman Kevin Warsh offered no fresh signals about potential interest rate policy moves while attending a meeting of financial leaders in Bangkok. The odds of a rate increase at the December meeting have jumped to 74.3% from 50.2% a month ago.